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7th Circuit affirms attorney's fees award under Lanham Act

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Finding a plaintiff’s actions frivolous, the 7th Circuit Court of Appeals today has affirmed a District Court’s grant of attorney’s fees to a company that successfully defended itself after selling lamps to the plaintiff home health care provider. The 7th Circuit also granted the defendant’s motion for fees and costs pursuant to Rule 38 of the appellate rules.

In Nightingale Home Healthcare, Inc. v. Anodyne Therapy, LLC No. 10-2327, appealed from the U.S. District Court for the Southern District of Indiana, Indianapolis Division, the 7th Circuit agreed with the District Court’s award of attorney’s fees in the amount of $72,747. The award was based on 15 U.S.C. § 1117(a), which allows attorney’s fees to be awarded to prevailing parties in Lanham Act suits, but only in “exceptional cases.”

However, Nightingale Home Healthcare, Inc. disagreed that this was an “exceptional case.” The 7th Circuit opinion, written by Judge Richard A. Posner, explained that while the other circuits have applied different tests to define what is an “exceptional case,” the panel on this case considered what the 7th Circuit has found in past opinions, including In Door Systems, Inc. v. Pro-Line Door Systems, Inc., 126 F.3d 1028, 1031 (7th Cir. 1997).

“We said that the test was whether the conduct of the party from which the payment of attorney’s fees was sought had been ‘oppressive,’ and that ‘whether the plaintiff’s suit was oppressive’ turned on whether the suit ‘was something that might be described not just as a losing suit but as a suit that had elements of an abuse of process, whether or not it had all the elements of the tort.’ But that, we said, ‘would not be the right question if the plaintiff had prevailed and was seeking the award of attorney’s fees. In such a case the focus would be on whether the defendant had lacked a solid justification for the defense or had put the plaintiff to an unreasonable expense in suing,’” Judge Posner wrote.

The section above was in response to whether a case was “exceptional” in terms of the awarding of attorney’s fees under the Illinois Consumer Fraud and Deceptive Business Practices Act, Judge Posner wrote.

However, fees in that case were also sought under the Lanham Act, and the court found that the test of whether a case is “exceptional,” he wrote, “is the same under both statutes, 'oppressive' in the sense expounded in Door Systems. Id. at 1031-32.”

In later cases, he wrote, the 7th Circuit further defined “exceptional” cases to be those that “lacked merit, had elements of an abuse of process claim, and plaintiff’s conduct in the litigation unreasonably increased the cost of defending against the suit;” cases that included “vexatious litigation conduct;” and a case could be found to be exceptional for reasons “'based solely on the weakness’ of the plaintiff’s claims.”

What is puzzling, he wrote, is that there are so many different definitions of “exceptional,” something he attributed to “Circuit drift,” where some circuits see more of these types of cases than others.

In this case, Judge Posner wrote the acts of Nightingale were “frivolous,” and even though Nightingale’s claims were regarding the intended use of the lamps they purchased from Anodyne, “the district judge found that Nightingale had made the claim in an attempt to coerce a price reduction from Anodyne.”

“To bring a frivolous claim in order to obtain an advantage unrelated to obtaining a favorable judgment is to commit an abuse of process,” Judge Posner wrote.

In addition to affirming the District Court’s award of attorney’s fees, the 7th Circuit also granted Anodyne’s motion for fees and costs pursuant to Rule 38 of the appellate rules.
 

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  1. He TIL team,please zap this comment too since it was merely marking a scammer and not reflecting on the story. Thanks, happy Monday, keep up the fine work.

  2. You just need my social security number sent to your Gmail account to process then loan, right? Beware scammers indeed.

  3. The appellate court just said doctors can be sued for reporting child abuse. The most dangerous form of child abuse with the highest mortality rate of any form of child abuse (between 6% and 9% according to the below listed studies). Now doctors will be far less likely to report this form of dangerous child abuse in Indiana. If you want to know what this is, google the names Lacey Spears, Julie Conley (and look at what happened when uninformed judges returned that child against medical advice), Hope Ybarra, and Dixie Blanchard. Here is some really good reporting on what this allegation was: http://media.star-telegram.com/Munchausenmoms/ Here are the two research papers: http://www.sciencedirect.com/science/article/pii/0145213487900810 http://www.sciencedirect.com/science/article/pii/S0145213403000309 25% of sibling are dead in that second study. 25%!!! Unbelievable ruling. Chilling. Wrong.

  4. Mr. Levin says that the BMV engaged in misconduct--that the BMV (or, rather, someone in the BMV) knew Indiana motorists were being overcharged fees but did nothing to correct the situation. Such misconduct, whether engaged in by one individual or by a group, is called theft (defined as knowingly or intentionally exerting unauthorized control over the property of another person with the intent to deprive the other person of the property's value or use). Theft is a crime in Indiana (as it still is in most of the civilized world). One wonders, then, why there have been no criminal prosecutions of BMV officials for this theft? Government misconduct doesn't occur in a vacuum. An individual who works for or oversees a government agency is responsible for the misconduct. In this instance, somebody (or somebodies) with the BMV, at some time, knew Indiana motorists were being overcharged. What's more, this person (or these people), even after having the error of their ways pointed out to them, did nothing to fix the problem. Instead, the overcharges continued. Thus, the taxpayers of Indiana are also on the hook for the millions of dollars in attorneys fees (for both sides; the BMV didn't see fit to avail itself of the services of a lawyer employed by the state government) that had to be spent in order to finally convince the BMV that stealing money from Indiana motorists was a bad thing. Given that the BMV official(s) responsible for this crime continued their misconduct, covered it up, and never did anything until the agency reached an agreeable settlement, it seems the statute of limitations for prosecuting these folks has not yet run. I hope our Attorney General is paying attention to this fiasco and is seriously considering prosecution. Indiana, the state that works . . . for thieves.

  5. I'm glad that attorney Carl Hayes, who represented the BMV in this case, is able to say that his client "is pleased to have resolved the issue". Everyone makes mistakes, even bureaucratic behemoths like Indiana's BMV. So to some extent we need to be forgiving of such mistakes. But when those mistakes are going to cost Indiana taxpayers millions of dollars to rectify (because neither plaintiff's counsel nor Mr. Hayes gave freely of their services, and the BMV, being a state-funded agency, relies on taxpayer dollars to pay these attorneys their fees), the agency doesn't have a right to feel "pleased to have resolved the issue". One is left wondering why the BMV feels so pleased with this resolution? The magnitude of the agency's overcharges might suggest to some that, perhaps, these errors were more than mere oversight. Could this be why the agency is so "pleased" with this resolution? Will Indiana motorists ever be assured that the culture of incompetence (if not worse) that the BMV seems to have fostered is no longer the status quo? Or will even more "overcharges" and lawsuits result? It's fairly obvious who is really "pleased to have resolved the issue", and it's not Indiana's taxpayers who are on the hook for the legal fees generated in these cases.

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